The cost of producing an additional unit of a good or service that is borne by the producer of that good or service is the
A) marginal social cost.
B) marginal private cost.
C) marginal external cost.
D) None of the above answers is correct.

Question

Quizplus · Accepted Answer

Marginal private cost refers to the cost of producing an additional unit of a good or service that is directly borne by the producer. This contrasts with marginal social cost, which includes both the private costs and any external costs (or benefits) to society. Marginal external cost specifically refers to the cost of producing an additional unit that is borne by individuals other than the producer, such as pollution effects on the community.

The Cost of Producing an Additional Unit of a Good